Forexpros – Asian stock markets retreated on Wednesday, as concerns over the outlook for global growth continued to weigh on investors’ appetite for riskier assets.
Stocks came off their lows amid speculation over further stimulus measures from China after Premier Wen Jiabao said promoting “reasonable” growth in investment is important.
During late Asian trade, Hong Kong’s Hang Seng Index eased down 0.3%, Australia’s ASX/200 Index dipped 0.1%, while Japan’s Nikkei 225 Index shed 0.2%.
Fears over the global economic outlook intensified after official data Tuesday showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
Investors were looking ahead to Chinese economic data due out later this week, including second quarter growth figures, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
In the euro zone, the German Constitutional Court delayed on Tuesday its decision on whether the euro zone’s bailout fund, the European Stability Mechanism, and planned changes to the region’s budget rules are compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, the latest meeting of euro zone finance ministers also continued to weigh on investor confidence.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country’s ailing banks but said some 30 billion euros would be available by the end of this month.
In Tokyo, chip makers were dragged lower after U.S. counterpart Applied Materials cut its full-year earnings outlook, citing a slowdown in demand from Europe and China.
Renesas Electronics tumbled 7.9%, Advantest dropped 3.25%, while Dainippon Screen lost 1.1%.
Shares in exporters with high exposure to China were lower, with heavy machinery maker Komatsu slumping 1%, rival Sumitomo Heavy Industries retreated 0.6%, while shares in industrial robot maker Fanuc shed 0.3%.
The Nikkei found support amid speculation of additional easing by the Bank of Japan. Market participants are hoping that the central bank could increase its asset purchases after it concludes a policy meeting on Thursday.
Shares in Hong Kong were set to close modestly lower, as the market found support after Chinese Premier Wen Jiabao said the country needs to maintain “a certain amount” of economic growth, fuelling expectations for further easing measures from Beijing.
Railway makers were higher after Wen called for private investments in railways. China Railway Group shares jumped 2.6%, while China Railway Construction shares gained 1.9%.
Elsewhere, shares in Australia were dragged lower by losses in global miners, amid fears over the global outlook.
BHP Billiton and Rio Tinto shares fell 0.35% and 1.15% respectively, while gold miner Newcrest Mining lost 0.35%.
Shares in Alumina tumbled 4.25%, tracking losses in U.S. counterpart Alcoa, which slumped after reporting disappointing earnings.
Looking ahead, the outlook for European stock markets was flat to mildly higher, as the lack of substantial progress in tackling the euro zone’s sovereign debt crisis continued to weigh on market sentiment.
The EURO STOXX 50 futures pointed to a gain of 0.1% at the open, France’s CAC 40 futures eased up 0.15%, London’s FTSE 100 futures added 0.2%, while Germany’s DAX futures pointed to a gain of 0.25% at the open.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Fed’s June policy-setting meeting.
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